Wyckoff Theory

Wyckoff Theory is a comprehensive price and volume analysis framework developed by Richard Wyckoff in the early 20th century, based on the observation that market prices are primarily driven by the activities of large institutional operators — which Wyckoff called the Composite Man. The theory describes four distinct market phases: Accumulation (institutions quietly buying), Markup (prices rising as the trend establishes), Distribution (institutions quietly selling into strength), and Markdown (prices falling). Wyckoff provided specific schematics for identifying each phase through price and volume behaviour, including concepts like the Selling Climax, Automatic Rally, Secondary Test, and Spring. Wyckoff Theory remains highly relevant in modern markets and is widely studied by technical analysts and SMC traders globally.